Across the restaurant industry, the business owner pays 50% of the profits and invests the other 50% in the business. So, if a ghost kitchen is normal, it can open up a new source of income, increase profits and gain more market share. Terri Bloomgarden, co-owner of Canter's Deli in the Fairfax neighborhood of downtown Los Angeles, says that traffic jams in the kitchen led her to open an external grocery store dedicated to home orders. Reaching a potential new market, downtown Los Angeles, was also considered.
For Terri, the solution was the outdoor kitchen, but restaurants with larger kitchens and those currently operating with limited dining capacity may run out of food in their current kitchen. The ghost kitchen concept can be activated at the most convenient and cost-effective times for the operator. Rich Levy co-founded three ghost kitchen concepts in Chicago: Cluckson's, Butterclaw Lobster Co., and Greenspan's Grill. Leaving traditional restaurants behind, he focused on a specific niche, corporate catering, and then established a minimum of 10 people for orders. Levy, a partner and an employee, takes care of all the orders and, if you need more help for the events, you can find it.
Greenspan is studying the possibility of turning at least one brand into a growth vehicle for physical locations, but plans to continue with the concepts of exclusive delivery. If you use your current restaurant, you can reverse the loss of capacity to eat in the restaurant (and, during the winter months, eat outdoors) by offering a ghost kitchen concept. This allows you to recover lost revenues and, at the same time, use your equipment, your staff and many of the same ingredients. The best way to control food quality is with dishes that are transported well, ensuring that hot foods stay hot and cold foods stay cold, Collins says. Ghost kitchens, for better or worse, rely heavily on third-party delivery services, such as ChowNow, Uber Eats, Postmates and GrubHub, making it difficult to establish a personal connection with diners. Now they say “I'm hungry” turn on their favorite delivery app and start browsing it to decide what they want to eat.
At first you may have to rely on third-party marketplaces for customer acquisition due to the high fees charged on some platforms but once you're more established working with ChowNow at a flat rate can keep your business growing. Cannibalizing an established restaurant business is also a risk. A possible alternative solution? Only operate home delivery as a “sub-brand” independent of your flagship company and offer different food or a reduced version of the local menu. The latter is probably recommended since many delivery orders are placed via mobile devices where simplicity is an advantage. If you're operating as an independent brand be sure to establish a strong brand presence through a website social media and Google Business to gain the trust of diners. The US Foods Ghost Kitchens program helps operators create a digital presence with industry-leading marketing solutions and expert support. As takeaway food is becoming a reality especially during and after the pandemic ghost kitchens can help restaurants prepare for what inevitably looms on the horizon.
The heat index on the latest trends in the catering industry play these numbers for a bigger payout. With the gastronomic landscape suddenly turned upside down due to the increase in cases of COVID-19 Food Fanatics magazine is your source for information on restaurant industry trends food innovations and the latest food service business advice to improve your bottom line. Takeout and home orders now account for nearly half of all restaurant sales get the packaging supplies and take-out services you need to meet demand keep up to date with our latest products and recipes. As we just saw Ghost Kitchen typically has gross margins of ~50% (after raw materials payment rates and shipping costs). In fact half of the total expenses are fixed costs (salaries rent marketing etc.). Leasing and equipping an economy type ghost kitchen is a bargain compared to building an entirely new restaurant but using existing equipment costs next to nothing to get started. Next week Restaurant Dive will analyze the main brands that have invested in ghost kitchen concepts this year.
This is why ghost kitchens could change the rules of the game as they could increase profit margins by increasing sales volume and reducing costs. Although gross margin is around 50% the EBITDA margin can rise between 10 and 15% depending on the company (in line with the industry average described above) and net profit margin between 5 and 10% for most profitable ghost cookers. Some small food operators used ghost kitchens to gain a foothold in the market at a time when opening a standard restaurant with dining room would have been unthinkable. US Foods which created a phantom kitchen services platform in August also helps guide customers when it comes to creating websites improving search engine optimization taking advantage of social media platforms and improving their Google profile since Google is main discovery mechanism on internet Stinn said. The ghost kitchen business model helps reduce your overall risk profile and accelerate your schedule toward potential profitability. It only requires two to four service employees and all support and compliance personnel are provided by ghost kitchen.
The most successful virtual brands also understand their food labor and operating costs to ensure that ghost kitchen operation is cost effective. Entering ghost kitchen may seem like way recover lost sales in dining rooms during pandemic but operators must consider food costs labor marketing brand value ensure reward. Ghost kitchens allow restaurants focus on core competencies while still providing customers convenience they crave.